GR 159748

Facts

Spouses Virgilio and Digna Calina availed of an agricultural loan (Deep-Sea Fishing) agreement through
Development Bank of the Philippines (DBP) in the amount of P1, 356,000.00 on different release by
tranches depending on the progress as stipulated in the agreement in the span of 5 years. The couple
were made to execute a promissory note in favor of DBP with 12% interest per annum.

On the August 1975, DBP released the first tranche of the loan for the commencing of the construction of
the vessel in Palawan.

In September 1975, the second tranche was released for the purchase of a Cummins Marine Diesel Engine
and was placed in storage. At this point, DBP has already released a total of P 451,589.80.

On January 1976, typhoon Asyang hit Palawan and totally destroyed the boat under construction. The
couple informed the bank of its intention to abandon the project due to the typhoon destruction. He
further requested to grant him 60 days to sell the Cummins Diesel Engine for the purpose of paying its
obligation.

On October 1978, DBP wrote a letter demanding payment of P 666,195.55 representing the whole
obligations plus interest.

On December 1980, DBP filed a complaint for sum of money with prayer of issuance of writ of
preliminary attachment for the Cummins Diesel Engine.

The couple filed an answer with counterclaim for payment of damages.

In an effort to settle their obligations, they informed DBP of a buyer to purchase the Cummins Diesel
engine for P 600,000.00 but DBP refused and resorted instead to public auction. However, there were no
participants in the auction.

DBP later decided to sell the engine to that interested buyer but loses interest thereafter. The engine
remained with the couple. DBP and the couple later agreed that the writ of preliminary attachment be
lifted so that the engine can be sold to other prospects. Eventually , the engine was sold at P 550,000.00
and was used to settle the obligation. However, DBP contented that the obligation was not fully paid.
Hence , it filed a case before the RTC.

The RTC dismissed the trial in favor with the couple. DBP appealed to CA and was granted .

The couple filed an Appeal under Rule 45 before the SC.

Issue:

WON spouses Virgilio and Digno Calina are still liable for their obligations despite payment from the sale
of the Cummins Diesel Engine.

Ruling:

The SC ruled that the spouses must pay remaining balance of the obligation plus the 12% per annum as
interest of the obligation while disallowing the Attorneys fees which was previously ordered by the CA.
GR 142668

UCPB and Luis Ma. Ongsiapco VS Ruben Basco

Facts

Respondent Ruben E. Basco had been employed with the petitioner United Coconut Planters Bank
(UCPB) for seventeen (17) years. He was also a stockholder thereof and owned 804 common shares of
stock at the par value of P1.00. He likewise maintained a checking account with the bank at its Las Pias
Branch under Account No. 117-001520-6. Aside from his employment with the bank, the respondent also
worked as an underwriter at the United Coconut Planters Life Association (Coco Life), a subsidiary of
UCPB since December, 1992. The respondent also solicited insurance policies from UCPB employees.

On June 19, 1995, the respondent received a letter from the UCPB informing him of the termination of his
employment with the bank for grave abuse of discretion and authority, and breach of trust in the conduct
of his job as Bank Operations Manager of its Olongapo Branch. The respondent thereafter filed a
complaint for illegal dismissal, non-payment of salaries, and damages against the bank in the National
Labor Relations Commission (NLRC), docketed as NLRC Cases Nos. 00-09-05354-92 and 00-09-05354-
93. However, the respondent still frequented the UCPB main office in Makati City to solicit insurance
policies from the employees thereat. He also discussed the complaint he filed against the bank with the
said employees.

The respondent was also employed by All-Asia Life Insurance Company as an underwriter. At one time,
the lawyers of the UCPB had an informal conference with him at the head office of the bank, during which
the respondent was offered money so that the case could be amicably settled. The respondent revealed
the incident to some of the bank employees.

On November 15, 1995, Luis Ma. Ongsiapco, UCPB First Vice-President, Human Resource Division, issued
a Memorandum to Jesus Belanio, the Vice-President of the Security Department, informing him that the
respondents employment had been terminated as of June 19, 1995, that the latter filed charges against
the bank and that the case was still on-going. Ongsiapco instructed Belanio not to allow the respondent
access to all bank premises. Attached to the Memorandum was a passport-size picture of the respondent.
The next day, the security guards on duty were directed to strictly impose the security procedure in
conformity with Ongsiapcos Memorandum.

On December 7, 1995, the respondent, through counsel, wrote Ongsiapco, requesting that such
Memorandum be reconsidered, and that he be allowed entry into the bank premises.

In many instances , the respondent entered the bank for a business transaction but was approached by
security guards showing the Ongsiapco memo. However, the respondent insist on conducting business
which the guards eventually agreed. The respondent claimed he was humiliated, his rights violated hence
this filing of a case.

Issue:

WON UCPB is liable for the violation of his rights.

Ruling

We rule in favor of the petitioners.

The evidence on record shows that Casil was in the working area of the ATM section on the ground floor
when he motioned the respondent to approach him and receive the check. The respondent then stood up
and walked towards the direction of Casil. Indubitably, the respondent was set to enter the working area,
where non-employees were prohibited entry; from there, the respondent could go up to the upper floors
of the banks premises through the elevator or the stairway. Caspe and the company guard had no other
recourse but prevent the respondent from going to and entering such working area. The security guards
need not have waited for the respondent to actually commence entering the working area before
stopping the latter. Indeed, it would have been more embarrassing for the respondent to have started
walking to the working area only to be halted by two uniformed security guards and disallowed entry, in
full view of bank customers. It bears stressing that the security guards were polite to the respondent and
even apologized for any inconvenience caused him. The respondent could have just motioned to Casil to
give him the check at the lobby near the tellers booth, instead of proceeding to and entering the working
area himself, which the respondent knew to be an area off-limits to non-employees. He did not.

The respondent failed to adduce evidence other than his testimony that people in the ground floor of the
petitioner bank saw him being stopped from proceeding to the working area of the bank. Evidently, the
respondent did not suffer embarrassment, inconvenience or discomfort which, however, partakes of the
nature of damnum absque injuria. Hence the court cannot award nominal damages.

On the third issue, we now hold that the petitioner bank is not entitled to damages and attorneys fees as
its counterclaim. There is no evidence on record that the respondent acted in bad faith or with malice in
filing his complaint against the petitioners.

GR 156168

Equitable Banking Corporation VS Jose Calderon

Facts

Sometime in September 1984, Calderon applied and was issued an Equitable International Visa card. The
said Visa card can be used for both peso and dollar transactions within and outside the Philippines. The
credit limit for the peso transaction is TWENTY THOUSAND (P20,000.00) PESOS; while in the dollar
transactions, Calderon is required to maintain a dollar account with a minimum deposit of $3,000.00, the
balance of dollar account shall serve as the credit limit.

n April 1986, Calderon together with some reputable business friends and associates, went to Hongkong
for business and pleasure trips. Specifically on 30 April 1986, Calderon accompanied by his friend, Ed De
Leon went to Gucci Department Store located at the basement of the Peninsula Hotel (Hongkong). There
and then, Calderon purchased several Gucci items (t-shirts, jackets, a pair of shoes, etc.). The cost of his
total purchase amounted to HK$4,030.00 or equivalent to US$523.00. Instead of paying the said items in
cash, he used his Visa card (No. 4921 6400 0001 9373) to effect payment thereof on credit. He then
presented and gave his credit card to the saleslady who promptly referred it to the store cashier for
verification. Shortly thereafter, the saleslady, in the presence of his friend, Ed De Leon and other shoppers
of different nationalities, informed him that his Visa card was blacklisted. Calderon sought the
reconfirmation of the status of his Visa card from the saleslady, but the latter simply did not honor it and
even threatened to cut it into pieces with the use of a pair of scissors.

Deeply embarrassed and humiliated, and in order to avoid further indignities, Calderon paid cash for the
Gucci goods and items that he bought.
Upon arrival in the Philippines , he filed a complaint for damages against the bank.

Issue

WON , the Bank is liable

Ruling

Injury is the illegal invasion of a legal right; damage is the loss, hurt or harm which results from the
injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there
can be damage without injury in those instances in which the loss or harm was not the result of a
violation of a legal duty. In such cases the consequences must be borne by the injured person alone, the
law affords no remedy for damages resulting from an act which does not amount to a legal injury or
wrong. These situations are often called damnum absque injuria.

In other words, in order that a plaintiff may maintain an action for the injuries of which he complains, he
must establish that such injuries resulted from a breach of duty which the defendant owed to the
plaintiff- a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The
underlying basis for the award of tort damages is the premise that an individual was injured in
contemplation of law. Thus, there must first be a breach of some duty and the imposition of liability for
that breach before damages may be awarded; and the breach of such duty should be the proximate cause
of the injury.

Moreover, the provision on automatic suspension without notice embodied in the same Credit Card
Agreement is couched in clear and unambiguous term, not to say that the agreement itself was entered
into by respondent who, by his own account, is a reputable businessman engaged in business activities
here and abroad.

On a final note, we emphasize that moral damages are in the category of an award designed to
compensate the claim for actual injury suffered and not to impose a penalty on the wrongdoer.

GR 169116

BPI vs SPS Ireneo and Liwanag Santiago, CENTROGEN by Edwin Santiago

Facts

CENTROGEN thru its President, Edwin Santiago contracted a loan in Far East Bank and Trust Company
and executed a Real Estate Mortgage over a parcel of land. However, they incurred default in payment
and the obligation becomes due and demandable.

Subsequently, BPI and FEBTC merged with the former as the surviving corporation which assumed all
rights, benefits and liabilities. Eventually, BPI filed an Extra-Judicial Foreclosure of Real Estate over the
said property.

Upon receipt of the Notice of Sale, the Spouses Santiago and Centrogen filed a Complaint seeking the
issuance of a Temporary Restraining Order and Preliminary and Final Injunction and in the alternative,
for the annulment of the Real Estate Mortgage with BPI.
The complaint alleged that the initial loan obligation in the amount of P490,000.00, including interest
thereon has been fully paid. Such payment notwithstanding, the amount was still included in the amount
of computation of the arrears as shown by the document of Extra-Judicial Foreclosure of Real Estate
Mortgage filed by the latter. Moreover, the Spouses Santiago and Centrogen contended that the original
loan agreement was for the amount of 5 Million but only 2 Million was released by petitioner and as a
result, the squalene project failed and the company groped for funds to pay its loan obligations.

On 27 February 2003, BPI was summoned to file and serve its Answer and on the same day, summons
was served on the Branch Manager of BPI . Instead of filing an Answer, BPI filed a Motion to Dismiss on
the ground of lack of jurisdiction over the person of the defendant and other procedural infirmities
attendant to the filing of the complaint. BPI claimed that the Branch Manager of its Sta. Cruz, Laguna
Branch, was not one of those authorized by Section 11, Rule 14 of the Revised Rules of Court to receive
summons on behalf of the corporation. The summons served upon its Branch Manager, therefore, did not
bind the corporation. Also alleged lack of authorityof the person who signed. RTC denied the MD and
issued new summons.

The RTC granted the TRO to prevent foreclosure sale. BPI file MR but was denied hence this petition with
BPI alleging that the court a quo did not acquire jurisdiction over its person and consequently, the Order
issued by the RTC, permanently enjoining the foreclosure sale, was therefore void and does not bind BPI.

Issue: Whether or not the court acquired jurisdiction over BPI

YES. The Court acquired jurisdiction over BPI. The defect of the service of the original summons was
cured by the issuance of the new summons which was not questioned by BPI.

1. There was substantial compliance. Although it may be true that the service of summons was made on a
person not authorized to receive the same in behalf of the petitioner. Since it appears that the summons
and complaint were in fact received by the corporation through its said clerk, the Court finds that there
was substantial compliance with the rule on service of summons.

2. The ultimate test on the validity and sufficiency on service of summons is whether the same and the
attachments thereto where ultimately received by the corporation under such circumstances that no
undue prejudice is sustained by it from the procedural lapse and it was afforded full opportunity to
present its responsive pleadings. This is but in accord with the entrenched rule that the ends of
substantial justice should not be subordinated to technicalities and, for which purpose, each case should
be examined within the factual milieu peculiar to it.

3. The Court also emphasized that there is no hard and fast rule pertaining to the manner of service of
summons. Rather, substantial justice demands that every case should be viewed in light of the peculiar
circumstances attendant to each.